Vejtasa: Real estate could see boost in ’13

Coldwell Banker Best Reality realtor Kathy Vejtasa gave a brief presentation Thursday to the Ridgecrest Exchange Club on the overall picture of the valley's real estate health, in addition to some financial tips.

Coldwell Banker Best Reality realtor Kathy Vejtasa gave a brief presentation Thursday to the Ridgecrest Exchange Club on the overall picture of the valley's real estate health, in addition to some financial tips.

“Our rates have been the lowest they have ever been,” Vejtasa said, indicating it was a good time to buy for those who could afford it.

Currently, the Federal Reserve allows banks to borrow at quarter percent (.25) interest, with lenders able to field loans at an increased interest rate, usually around 3.75 percent.

The national average for a 30-year fixed mortgage rate is 3.63 percent, according to a Freddie Mac statement released Thursday.

“I've been in real estate 33 years and it's the lowest I've ever seen them,” Vejtasa said

She said there was a reason behind the wide range of interest rates.

“The reason for the 3.5 percent difference is that it is a bank's profit and overhead,” she said. “That allows the banks to loan at a very reasonable rate.”

She said the buyer's dilemma right now, at least as far as the valley was concerned, was whether to buy now in light of potential furloughs by the Navy regardless of whether rates were still low.

“The buyer's dilemma is: 'With what's happening on base, I may be decreasing my income by 20 percent, should I buy and worry about that 20 percent decrease later and take advantage of that low interest rate now?'” she said.

Vejtasa said there was a possibility the Fed's loan rate could jump to 1.25 percent in a year if the economy kept on track.

“That's still very low and reasonable but it provides a dilemma for the buyers,” she said. “Should they buy now or hold?”

One recommendation she offered was to aim for a house at 80 percent of what could be afforded on a full time salary.

Overall, total homebuyer debt – including taxes, principle, interest and any home owners associations fees – should not exceed 43 percent of a person's income.

Vejtasa pointed out one of the reasons the housing market tanked was because the lax monitoring on lending.

“Banks were qualifying people for more than they could afford and people were gambling on homes, particularity in Los Angeles County and Orange County,” she said.

She said home values would not have been so affected if it hadn't had happened in the larger cities.

“It wasn't until our property values went down that we had problems,” she said.